Consultation Response: Prohibiting ​ ​ ​ ​​​ ​​ Third Party Betting on Non-UK ​ ​ ​ ​ ​ ​ ​ ​ EuroMillions Draws ​ ​ November 2017 ​ ​ 0 Executive Summary 2 ​ ​ Background 3 What we asked: 3 ​ ​ ​ ​ The responses: 3 ​ ​ Chapter 1: Proposal to prohibit betting on non-UK EuroMillions draws 5 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Chapter 2: Impact on Good Causes 9 ​ ​ ​ ​​ ​ ​ ​ ​ ​ ​ Chapter 3: Consumer Confusion 13 ​ ​ ​ ​​ ​ ​ Chapter 4: Business Impact 16 ​ ​ ​ ​ ​ ​ ​ Annex 1: List of Respondents 20 ​ ​ ​ ​ ​ ​ ​ ​ 1 Executive Summary ​ ​ In March 2017, Government published a consultation on a proposal to close the regulatory loophole which allows betting on non-UK EuroMillions. The responses that we received indicate broad support for this proposal, noting the importance of National Lottery funding to good causes across the UK, and the anomalous position of non-UK EuroMillions in the law. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ We intend to introduce a new licence condition to prohibit consumers in Great Britain from placing bets on EuroMillions games which take place outside the UK. This will ensure that these draws receive the same level of protection in relation to funds for good causes raised by The National Lottery as is the case for UK EuroMillions draws. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ We are mindful of the effect on impacted businesses, and will tailor the licence condition to ensure it is in line with our aims to reduce consumer confusion, and protect returns to good causes in the UK. Betting operators will still be able to offer bets on international lotteries. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2 Background Betting on the outcome of the National Lottery, including the UK EuroMillions game, is prohibited under section 95 of the Gambling Act 2005. Provisions in the Act replace those introduced when the National Lottery was launched in 1994, which amended the Betting, Gaming and Lotteries Act 1963 so that a bookmaker or betting operator which took a bet on the outcome of the National Lottery lost its licence. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ EuroMillions was launched in 2004 and the UK was one of its founding participants, along with France and Spain. Nine countries now participate in EuroMillions, and although each country’s game relates back to a single draw held in Paris, the nine games are technically separate. As a result of this technicality, some gambling operators currently offer a bet on the outcome of EuroMillions draws offered abroad (for example, a bet on the outcome of the Spanish EuroMillions draw). ​ ​ ​ ​ Our view is that this practice runs counter to the spirit and intention of section 95 of the Gambling Act, which seeks to maintain the clear blue water between the National Lottery and commercial gambling products, thereby protecting returns to good causes. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Government ran a consultation from March 6 to May 2 on a proposal to close this regulatory loophole via a licence condition to prohibit betting operators licensed by the Gambling Commission from offering such products. ​ ​ ​ ​ ​ ​ ​ ​ What we asked: ​ ​ ​ ​ The consultation asked 27 questions to gauge: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ● Stakeholder reaction to the proposal ​ ​ ​ ​ ​ ​ ​ ​ ● Potential for customer confusion ​ ​ ​ ​ ​ ​ ● Impact on Good Cause returns ​ ​ ​ ​ ​ ​ ​ ​ ● Impact on business ​ ​ ​ ​ The responses: ​ ​ The Government received 52 responses to the consultation via letter, email, and online survey responses. ​ ​ Consultation Responses ​ ​ 52 Total number of emails, letters, and online survey responses received ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ This included: ​ ​ 3 27 Online survey responses ​ ​ ​ ​ 25 Emails and letters ​ ​ ​ ​ Of which: ​ ​ 2 Duplicates 6 Letters of general support, rather than direct responses to the consultation. Respondents included lottery operators, betting operators, organisations from the Voluntary and Community sector, and members of the public. A full list is included at Annex 2. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ● 10 lottery operators or lottery representative groups (e.g. Camelot, or the World Lottery Association). Camelot currently holds the licence to operate The National Lottery until 2023. ​ ​ ​ ​ ● 7 lottery distributors, including a submission from The Lottery Forum, which ​ represents the 6 largest National Lottery distributors. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ● 8 voluntary and community sector organisations. Such organisations often are ​ ​ the beneficiaries of National Lottery and/or other charity lottery funding. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ● 5 retailers or retail groups. National Lottery retailers receive commission from ​ ​ National Lottery ticket sales. ​ ​ ​ ​ ​ ​ ● 5 betting operators. We understand that these operators offer betting on ​ EuroMillions products directly, or through owned companies. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ○ Lottoland is a prominent online company in the lotto betting sector. It was founded in 2013 as a British start-up based in Gibraltar and is active across four continents. ​ ​ ○ MyLotto24 (formerly Tipp24 UK) has been licensed in Britain since 2007 and acts as a remote bookmaker for customers wishing to place bets on the outcome of non-UK lotteries. The operator does not allow UK customers to place bets on the outcome of any EuroMillions draws. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ○ Annexio Limited trades as PlayLottery and World Lottery Club and offers remote betting services through associated websites. It is licensed by the Isle of Man Gambling Supervision Commission, the UK Gambling Commission, and the Republic of Ireland Revenue Commissioners. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ○ Jackpot.com offers remote betting and syndicate play. It is owned and ​ ​ operated by Lottomatrix Limited. ​ ​ ​ ​ ​ ​ ○ International Multi Media Entertainments Limited (“IMME”) facilitates entry into State-run traditional lotteries. Its operations include International Multi-Media (“IMM”), LottoExpress, The Lottery Centre JackpotWorld, and Lotteries.com. IMME holds a betting licence for real events in the UK under Lotteries.com and a lottery re-sellers licence in the Isle of Man. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 4 The remaining respondents chose to remain anonymous or are members of the public. The ​ figures below refer to the number of responses which directly responded to a consultation question, and do not include blank or duplicate responses. We also held meetings with Annexio, Lottoland and Lottomatrix to discuss the consultation, at their request. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 5 Chapter 1: Proposal to prohibit betting on non-UK EuroMillions draws In the consultation we noted that betting on non-UK EuroMillions draws is contrary to the intention and spirit of section 95 of the Gambling Act 2005, which seeks to preserve a distinction between betting and The National Lottery to protect returns to good causes and prevent consumer confusion. We therefore proposed introducing a licence condition to prohibit betting operators licensed by the Gambling Commission from offering such products. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ In our consultation we asked respondents to what extent they agreed or disagreed with this proposal. 32 respondents strongly agreed that betting on the outcome of non-UK EuroMillions games ​ should be prohibited. An additional 6 responses were submitted which supported a prohibition, but did not respond directly to the consultation question. These have not been included in the graph above. ​ ​ ​ ​ ​ ​ ​ ​ A range of reasons were provided, some of which echoed concerns set out in our consultation document, including the risk of consumer confusion, and the existence of a regulatory loophole. ​ ​ Other themes included: ​ ​ ​ ​ 6 ● Protection of National Lottery good cause funding: Beneficiaries of lottery ​ funding, members of the public, and lottery operators noted the value of lottery grants in supporting projects across the UK, and voiced concerns that the National Lottery’s performance could be hampered by growth in the betting on EuroMillions market. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ● Protecting integrity of the National Lottery brand: The European Lotteries, an ​ ​ umbrella organisation of national lotteries, considered that “that betting operator can be considered to parasitize off the investments made by the lottery operator to put in place a secure and reliable draw (involving the presence of on-site people, IT support, maintenance, development, purchase of material, use of space, etc.).” The Heritage Lottery Fund’s research conducted with National Lottery players indicates that there is “strong support for the projects we [HLF] fund but also that increasing the visibility of this funding would encourage them to be positive about purchasing tickets, so maintaining the recognition of the National Lottery and minimising confusion is a consideration.” ​ ​ ​ ​ ​ ​ ● Blurred boundaries: A number of lottery operators, organisations and beneficiaries ​ repeated concerns raised in the CMS Select Committee Report 2015 that the boundaries between the betting and lottery sector had become blurred. The Association of Charity Lotteries in the European Union (ACLEU), an international non-profit organisation which promotes the charity lottery model, commented that “Recent years have seen an increasing overlap in the betting and lottery industries ​ across Europe. Concerns have been raised in several Member States (next to the UK, also in Germany